Portrait of the problem

What an AWESOME RESOURCE!!! Nice job Binyamin!!!

JP - 10% foreclosure, 40% No Docs, 70% ARMS and 37% Resetting in the next 12 months....

WOW we are in for a world of Hurt around here....

40% No Docs
10% In Foreclosure
70% ARM's
38% ARM's Resetting within 12 months

= NOT GOOD

It's not as bad as those numbers may make it seem. The first three numbers give the scale of the problem, and the rest offers breakdowns of the problematic loans. So, for example, only 2.2% of housing units have outstanding subprime loans. A scant 0.2% are in foreclosure, and just 0.14% are owned by the lenders. (Actually, it's a little more complicated. The NY Fed estmates that it's got just under half of all subprime loans in its database. So a rough guess would be that each of those figures should be roughly doubled to get a sense of the magnitude of the problem.)

The rest of the numbers relate to the share of the 22 loans per 1000 housing units that were tendered at subprime rates. So it's 70% of those 22 per 1000 that are ARMs, for example. It's reasonable to suppose that the share would remain roughly constant, even if you double the number of loans.

If you're looking for alarming news here, you'll find it in the evidence that we've just seen the tip of the iceberg. In JP, for instance, the data suggest that roughly as many loans are currently at least 90 days delinquent as are in foreclosure. Barring dramatic intervention, it's tough to imagine that those delinquent loans won't themselves move into foreclosure, doubling the number. The data also show that some 45% of subprime loans in JP aren't current - so there's plenty of room for further foreclosures. (At least 18% of the 56% of loans which were current in December had seen late payments in the past 12 months.) And just over a quarter of the subprime loans are ARMs that will reset within 12 months - suggesting that even more owners will shortly fall behind on their payments.